And here’s bad news from Western Digital
TOKYO — Western Digital has sought international arbitration to stop partner Toshiba from selling its chips arm without its consent, potentially derailing a much-needed capital injection for the Japanese conglomerate.
The two companies jointly operate Toshiba’s main semiconductor plant but Western Digital is not a favoured bidder for the world’s second-biggest NAND chip producer, having put in a much lower offer than other suitors, a source with knowledge of the matter has said. A legal battle could delay or put an end to an auction that could fetch some $18 billion and has attracted suitors such as private equity firm KKR & Co, Taiwan’s Foxconn and US chipmaker Broadcom.
Toshiba is depending on the sale to cover billions in dollars in cost overruns at its nowbankrupt Westinghouse unit. After months of souring relations, Western Digital has begun arbitration procedures with the International Chamber of Commerce, demanding Toshiba reverse a move to put their joint venture assets into a newlyformed unit — Toshiba Memory — and stop any sale without Western Digital’s consent.
Western Digital’s “efforts to achieve a resolution to date have been unsuccessful, and so we believe legal action is now a necessary next step”, CEO Steve Milligan said in a statement.
Toshiba CEO Satoshi Tsunakawa told a news conference the complaint was groundless and that Toshiba would push on with the sale, sticking to its plan to complete the second round of bidding on Friday.
“We will make efforts to convince bidders of the legitimacy of the chip-unit sale and wipe away their concerns,” he said.
Toshiba argues neither party can block a change of control by the other partner. —